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You may apply for Alternative Dispute Resolution (ADR) if you need help in dealing with an issue between yourself and HM Revenue & Customs (HMRC). This may be during an enquiry or compliance check, or another type of disagreement. 

The aim of ADR is to solve the problem, although you may still apply for an independent review or apply for an appeal to be heard at Tribunal.

More about ADR

A third party who has not been involved in the dispute will act as a mediator between yourself and the officer dealing with the case on behalf of HMRC, to try and reach a solution. Their role isn’t to lead the case or become responsible for it, but to help both parties through telephone conversations and meetings to resolve the issue. The mediator will guide you through the process, helping you to focus on the relevant areas that require resolution and even restart communications. When you ask for ADR, you should also apply to appeal against the decision, although you can also request ADR before a decision has been made by HMRC.

Can you use ADR?

ADR isn’t suitable for all situations and is mainly focused on helping to resolve disputes rather than personal tax affairs. However, in some cases, personal tax disputes can also be resolved using ADR. If you are unsure whether ADR will be useful during a tax disagreement, consult your accountant, who will help you to apply to HMRC.

When might ADR be useful?

ADR may be useful when trying to re-establish the facts of a case, to set out what has happened. It may also be useful when communication between you and HMRC has stopped, helping to re-establish contact. During an investigation, HMRC may request evidence and in the process, the organisation may refuse evidence you have already supplied. ADR can help you to establish why HMRC has refused evidence.

There may also be occasions when HMRC requests information from a number of years earlier, even though it has been filed away and retrieval may be difficult. During ADR, HMRC will explain why the information is required. Very often, during a dispute there will be a lack of clarity on both sides, which is where ADR can help to shed light on certain points for both parties.

Applying for ADR

You can apply for ADR through your case worker or Customer Relationship Manager if you own a large business. You can also apply online or through your tax adviser.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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